MAY 2007
Newsmakers
Keeping the Beat Behind the Scene
Some employers give time off for visits to doctors and lawyers. At Musictoday, where Nathan Hubbard, MBA ’04, runs day-to-day operations, employees get two “concert days” a year. Founded by a Grateful Dead fan in a former frozen food factory in Charlottesville, Va., the company quietly maintains websites for recording artists and other celebrities, and helps them collect more of the profit from the sales of CDs, concert tickets, and paraphernalia to their fans than they used to get when other middlemen took charge.
Hubbard uses warehouse management software, handheld scanners, and automated packing machines to make sure fans get the Snoop Dogg rubber wristbands and Carole King yoga pants they ordered, reported Fast Company. Technology also helps the company keep scalpers from gobbling up all the concert tickets, Hubbard says, because “when we screw up, fans don’t blame Musictoday, they blame the artist.” As half of the acoustic duo Rockwell Church, Hubbard doesn’t want that to happen to him.
And You Thought You Had A Bad Day!
Running a regional supermarket chain in the era of Wal-Mart superstores is not easy, but as a new CEO in the summer of 2006, Scott Schnuck, MBA ’75, had a bigger test when a huge storm knocked the electricity out of 26 Schnuck Markets, their warehouse, and dairy.
Based in St. Louis, he was able to get the warehouse up in six hours. But, he told the St. Louis Post-Dispatch, before power came back up “I got a call from Memphis that we have an employee that has just cracked, stormed through the store, and stabbed eight of our employees. I am sitting here saying, ‘What do I do? What are my priorities?’ The priority was obvious. It was to get down to Memphis as fast as I could and make sure the people who were injured had the support of the company.”
Partners from Playpen to Corner Office
Picking a business partner at age 8 was a no-brainer for John Radford, MBA ’75. His parents needed cash to make ends meet, so he and his identical twin, Steve, decided to sell mistletoe door-to-door at Christmas in Southern California.
Those sales skills came in handy again in 1977, when the twins decided nobody was doing a good job of keeping track of compensation trends in the high-tech industry. Today Radford Surveys and Consulting is one of the leading compensation data services in high tech and biotech worldwide, according the Silicon Valley/San Jose Business Journal. Now a unit of Aon Corp., the company has prominent clients like Intel and Microsoft. The brothers are both senior vice presidents: Steve for marketing, and John for strategy.
Seeking a Soccer Field
She was a soccer player at Princeton, and now Ann Rodriguez, MBA ’05, is working to bring Major League Soccer back to the San Francisco Bay Area. She is part of a team that includes Lewis Wolff and John Fisher, MBA ’89, who are also owners of Major League Baseball’s Oakland Athletics. The San Jose Earthquakes soccer team left for Houston in 2005 when an initiative to build a stadium failed. According to the Daily Princetonian, Rodriguez is working with two men who have an option to bring a team back if they can get a stadium built.
Meanwhile, Mike Golub, MBA ’88, moved from overseeing business operations for the NBA’s Memphis Grizzlies to a similar role at the league’s Portland Trail Blazers.
Know When to Hold ’em
Trading costs eat holes in the pockets of mutual fund investors, so Smart Money magazine set out to find top-earning funds whose managers traded the least. Among those picked was John Linehan, MBA ’98, who manages the T. Rowe Price Value fund. In the past three years the fund returned an average of 15 percent annually, better than 81 percent of the large-cap value offerings.
That doesn’t mean Linehan has no regrets, however. He did several trades in 2005 to “harvest losses for taxes, and everything I sold went up in the fourth quarter. We’ll try not to do that again.”
London Fends Off Unwanted Suitor
“I see a world awash with opportunities,” Chris Gibson-Smith, Sloan ’85, said in February, following NASDAQ’s third failed attempt to take over the London Stock Exchange, which he has chaired since 2003. The American exchange, which owns about 29 percent of the LSE, cannot make another offer to buy out other LSE stockholders for 12 months under U.K. rules, but a consortium of bankers is threatening to set up a rival trading platform in London. Meanwhile the LSE is negotiating potential deals with exchanges in Tokyo and Mumbai.
Gibson-Smith agrees with many who say the world’s exchanges are in for exponential change, but he claims that hostile suitors have failed to recognize the value of the LSE, where trading volumes, driven by rising algorithmic trading, are growing at an annual rate of 55 percent. Asked to speak about his deep strategy, the former BP geologist told the Times of London, “The deep strategy of companies is secret by definition, otherwise it wouldn’t be deep strategy.”
Asian Experience Brings Added Value
When the designer of microchips and software for transmitting video over fiber looked for a CEO, the language skills of Greg Caltabiano, MBA ’86, mattered because the company uses manufacturers and sales teams in Asia. Fluent in Japanese and comfortable in Mandarin, Caltabiano lived for 10 years in China, where the Petaluma, Calif.-based company known as Teknovus hopes to expand next.
Its strongest markets now are in Japan and Korea, according to the North Bay Business Journal, which refers to Sonoma County as “Access Valley” because of the concentration of telecommunications businesses. U.S. cable companies lag Asia and Europe in pushing voice, video, and data over fiber networks, Caltabiano said.
Coin Collector Digs Farming
Kids often reject their parents’ business, but after making enough to retire at age 39 in his own business, Jens Molbak, MBA ’90, has taken over his parents’ 40-acre farm and nursery in Woodinville, Wash. Molbak created Coinstar, a firm supplying machines to supermarkets that let people get rid of loose change more easily than taking it to the bank. He retired after taking the company public in 1997 but is now bringing more perennials and grasses into the family nursery, says the Seattle Times. “Turns out I knew more about the nursery business than I suspected,” said Molbak, who as a kid once scrubbed 280,000 pots to earn money to visit his grandfather in Denmark.
Rainmaker Finds Liquidity in Hedges
His boss calls Gus Spanos, MBA ’88, a rainmaker—one of the first chief financial officers of a high-tech startup to turn his back on venture capital for a more favorable deal from hedge funds, according to Red Herring magazine. Since Spanos accepted $75 million in 2005 from hedge funds, other startups also have turned to this plentiful source of financing, which is cutting into venture capital firms’ earnings, according to the magazine.
Spanos works for Pay By Touch of San Francisco, which sells fingerprint-based payment systems now used in 42 states. The company has since raised $150 million more from hedge funds and private investors.
Dotshots, Take Two
In the heyday of dot-coms, Mark Selcow and Matt Glickman, both MBA ’93, were the founders of BabyCenter.com, which was eventually sold to eToys for stock that promptly lost value. When their early-retirement options disappeared, the two in 2001 cofounded Merced Systems in Redwood City, a company with 90 employees and 30 customers that makes software to help firms track the efficiency of their call center operators, according to the San Francisco Chronicle. What did they learn from their limited success with BabyCenter? Said Glickman: “In hindsight, we could have raised more money. We’ve learned about the value of holding onto your company.”
Don’t Hover Too Closely
As chairman of India’s Reliance Industries, Mukesh Ambani, a member of the MBA Class of 1981, faces a lot of tough decisions, but some of the toughest relate to inspiring his children to find their talents. “When my kids, Isha and Akesh, were in the third standard, we behaved as though it was our exam,” he told Rediff.com, India’s largest online news and entertainment service. “I know everything and I can beat any parent my age,” he said with a chuckle, but “the trick is to light a fire” in your kids so they want to learn by themselves.
His own entrepreneurial father “never came to our school once,” Ambani said, but spent Sundays with his family on activities like nature walks and baths in streams. “It’s easy to be with your kids and say let’s do homework together,” Ambani says.
Somehow academics stuck with him—his mania for testing has deep roots. “My friends and I wrote all sorts of competitive exams,” he recalls. “It was mainly driven by a desire to prove to ourselves that we are no less than anyone in the world. We even took the civil services exams just to see if we could get onto the list.”
Real Estate Leader
In one of the hottest real estate markets in the world, Janet Case, MBA ’91, steers two associations of Realtors—the San Mateo and Silicon Valley regional associations. As one might expect from such a perch, she is also familiar with virtual real estate. Reports the Silicon Valley/San Jose Business Journal, she initiated a joint effort of 11 regional associations to upgrade digital lockbox systems so that agents can access properties—you guessed it—over the internet.
